Wednesday, February 06, 2019

The sequence of events after Prime Minister Narendra Modi’s announcement in April 2015 to purchase 36 Rafale in flyaway condition from France indicates that he not only unilaterally announced the deal but also decided the price of the aircraft on his own. And all this seemed to have been designed and intended to favour a fledgling private sector Indian defence company. No prizes for guessing which one.
To reach this conclusion, all we tried to do is join the dots in the information that is already in the public domain.
Remember, that in May 2016, the then Defence Minister, Manohar Parikkar, had told the media that the “Negotiations on the terms and conditions of the supply of 36 `Rafale’ fighter aircraft, including those related to total cost, actual delivery timelines and guarantee period, have not been concluded”.
In the same month, an article published ( May 4, 2016) by a corporate intelligence news portal, Intelligence Online, read: “Before the end of the spring, the Indian defence minister could resolve the final issue before signing a Euros 7.8 billion order for 36 Dassault-built Rafale (emphasis added) fighter aircraft. The Indian military is under intense pressure to conclude the deal by the leaders of the ruling Bharatiya Janata Party (BJP), the office of the Prime Minister Narendra Modi and the National Security Advisor Ajit Doval, all of whom are amazingly keen on the French deal. But the French companies on Team Rafale have been going all out to woo the ruling party.”

There are two key issues here. One is the price of the 36 aircraft – $7.8 billion. Is it a mere coincidence that the final price – as is now openly being discussed – is virtually the same? The second, if the Intelligence Online’s report has any basis, what is the role of the BJP leadership, the PM and even the NSA, Mr. Doval, in a defence deal and what can explain their support for Anil Ambani’s role in the deal?

The problem in Anil Ambani’s fledgling defence venture being given a role in the Rafale deal was Dassault’s reluctance. The “solution” was to have Anil Ambani have a role not in Rafale manufacture but in other Dassault projects. In September 2015, financial daily Economic Times, quoting Defence Ministry sources, had reported that on the offset, obligations will not be on the defence sector, but on civilian projects.
06/02/19 News Click